Silver Price Forecast: XAG/USD gains momentum above $28.00 on rising industrial demand
Source Fxstreet
- Silver price extends its upside around $28.50 in Thursday’s early European session.
- Rising industrial demand and ongoing tensions in the Middle East benefit the white metal.
- The higher chance that the Fed will delay its easing cycle might cap the upside of the silver price.
Silver price (XAG/USD) gains momentum near $28.50 on Thursday during the early European session. The upsurge of the white metal is bolstered by rising industrial demand and safe-haven flows amid the ongoing geopolitical tensions in the Middle East.
The Silver Institute released its annual World Silver Survey on Wednesday, showing that industrial demand in the silver market is expected to hit another record high this year, climbing 9% to 710.9 million ounces. The rising demand is driven by silver demand for Photovoltaic (PV) solar panels. Furthermore, the ongoing tensions in the Middle East, particularly between Iran and Israel, might further fuel the demand for silver. ANZ commodity analysts said that silver still has significant potential, even after hitting solid resistance at $29.90 last week.
On the other hand, the growing speculation that the Federal Reserve (Fed) will delay its easing cycle might cap the upside of silver price. Fed Cleveland President Loretta Mester said on Wednesday that inflation is higher than anticipated and the Fed needs more confidence in its trajectory. Earlier this week, Fed Chair Jerome Powell emphasized that he will wait for more evidence to gain confidence that inflation is headed toward the central bank’s 2% goal before lowering borrowing costs. It’s worth noting that the higher-for-longer US rate narrative might dampen demand for white metal, a non-interest-bearing asset.
Disclaimer: For information purposes only. Past performance is not indicative of future results.
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The downturn occurred despite the reopening of the U.S. government on Thursday, which many had hoped would provide essential support for crypto markets. This year initially appeared promising for cryptocurrencies, particularly after the inauguration of President Donald Trump, who has established the most pro-crypto administration thus far. However, ongoing political tensions—including Trump's tariff strategies and the recent government shutdown, lasting a historic 43 days—have contributed to several rapid price pullbacks for Bitcoin throughout the year.
Market dynamics are also being influenced by Bitcoin whales—investors holding large amounts of Bitcoin—who have been offloading portions of their assets, consequently stalling price rallies even as positive regulatory developments emerge. Despite these sell-offs, analysts from Glassnode argue that this behavior aligns with typical patterns seen among long-term investors during the concluding stages of bull markets, suggesting it is not indicative of a mass exodus.
Notably, Bitcoin is not alone in its struggles, as Ethereum and Solana have also recorded declines of 7.95% and 28.3%, respectively, since the start of the year, while numerous altcoins have faced even steeper losses.
Looking ahead, questions linger regarding the viability of the four-year cycle thesis, particularly given the increasing institutional support and regulatory frameworks now in place in the crypto landscape. Matt Hougan, chief investment officer at Bitwise, remains optimistic, suggesting a potential Bitcoin resurgence in 2026 driven by the “debasement trade” thesis and a broader trend toward increased adoption of stablecoins, tokenization, and decentralized finance. Hougan emphasized the soundness of the underlying fundamentals, pointing to a positive outlook for the sector in the longer term.
Bitcoin experienced a sharp decline this weekend, briefly erasing its 2025 gains and dipping below its year-opening value of $93,507. The cryptocurrency fell to a low of $93,029 on Sunday, representing a 25% drop from its all-time high in October. Although it has rebounded slightly to around $94,209, the pressures on the market remain significant.
The downturn occurred despite the reopening of the U.S. government on Thursday, which many had hoped would provide essential support for crypto markets. This year initially appeared promising for cryptocurrencies, particularly after the inauguration of President Donald Trump, who has established the most pro-crypto administration thus far. However, ongoing political tensions—including Trump's tariff strategies and the recent government shutdown, lasting a historic 43 days—have contributed to several rapid price pullbacks for Bitcoin throughout the year.
Market dynamics are also being influenced by Bitcoin whales—investors holding large amounts of Bitcoin—who have been offloading portions of their assets, consequently stalling price rallies even as positive regulatory developments emerge. Despite these sell-offs, analysts from Glassnode argue that this behavior aligns with typical patterns seen among long-term investors during the concluding stages of bull markets, suggesting it is not indicative of a mass exodus.
Notably, Bitcoin is not alone in its struggles, as Ethereum and Solana have also recorded declines of 7.95% and 28.3%, respectively, since the start of the year, while numerous altcoins have faced even steeper losses.
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